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Re: Greece's Tsipras calls referendum to break bailout deadlock

Originally Posted by Andalublue

It's you who doesn't know your history. Samaras was finance minister in the late 90s, before the launch of the Euro, in that period when they were fixing the stats, assisted by Goldman Sachs and with the connivance of the ECB, IMF and other EU countries.

They've been " fixing the Stats " ever since they entered the Union under false pretenses

After becoming a member they took advantage of their new Fiscal status as a Member Nation in good standing to borrow at much lower rates.

There were strict limitations on deficit spending written into the Treaty that Greece signed to get into the EU.

Those limits were ignored while a corrupt Greek Government financed entitlements , unsustainable public sector give aways and public sector pensions with other people's money

The worst thing they could have done was to elect a radical Che Guevara worshipping left wing activist instead of a leader.

Re: Greece's Tsipras calls referendum to break bailout deadlock

Originally Posted by PeteEU

I suspect not. The new drachma would be worthless, and Greece would not be able to tap international credit markets. So how exactly would they pay for basic things like... fuel. Without fuel, the country cant run.. it is as simple as that. Add to that food and other things that the Greeks import. Car parts.. suddenly getting your car fixed goes up several hundred pro cent.. that is if you can afford buying gasoline of course.

Now the argument for the pro-Grexit people would be that, the Greek exports would become cheap.. yea that is true, but at the same time the imports would become extremely expensive. So only things produced in Greece would be affordable to locals, and this can cause problems in the short run. Also as someone above pointed out, Greece does not have a big export business. This can of course grow due its cheapness, but that takes time.. something that Greece does not have.

Another argument for the pro-Grexit people is that, yes but tourist would flock to Greece because it is so cheap. This is true, but would people really want to go to Greece, a country in social upheaval? Not to mention.. remember the first point.. fuel? How fun is it to be in a country where the power goes out? I mean there are cheap places to go in the Balkans, and yet you dont really see Romania and Bulgaria as hotspots for tourists do you? Now Greece has history and is historically a tourist hotspot, but we have seen how tourism has suffered in 2009-2012.. it has picked up some what, but no where near as it should have and suddenly because they have a new currency then it should explode? I dont think so.

But the fundamental problem for Greece is that just because they make a new currency, this does not mean that they dont still owe all that money away... they do. So you will see lawsuits in many countries going after Greek assets abroad.. we have seen that with Iran and Argentina. And then there is of course all the deposits in Greece.. they will be converted to the new currency, but chances are that the loans that locals have will still be in Euros... which causes even bigger problems. You have savings and income in New Drachma that is worthless, but you need to pay your mortgage in Euros. We saw what that did in Iceland.. 25% of the home owners over night went belly up.

So the argument for a New Drachma all boils down to one thing.. the ability to print money and pay locals in that money.. they cant buy anything with it, but at least they are getting paid right?

Greetings, PeteEU.

Excellent post! I wasn't thinking as far ahead as you are, and reading your post was like opening a window on possible future problems for Greece. Focusing only on tourism, the recent ISIS massacre of vacationers in Tunisia is bound to cool tourism in many places around the globe, Greece included. Poor little Greece doesn't have much to look forward to, do they? They're damned if they do, and damned if they don't, and that's so sad! I did see an article on Yahoo that people are withdrawing all the money they can from their ATMs at the banks, even running some of them bone dry, so they are trying to cope with what's happening the only way they can. That's a short term thing, though - what's going to happen when all that money is spent? *shaking head in pity for the people of Greece*

Re: Greece's Tsipras calls referendum to break bailout deadlock

Originally Posted by polgara

Greetings, PeteEU.

Excellent post! I wasn't thinking as far ahead as you are, and reading your post was like opening a window on possible future problems for Greece. Focusing only on tourism, the recent ISIS massacre of vacationers in Tunisia is bound to cool tourism in many places around the globe, Greece included.

Actually that will most likely benefit Greece a bit. Most likely it will benefit Portugal, Spain and Italy a lot, just like the Egypt decline in tourism has done

Re: Greece's Tsipras calls referendum to break bailout deadlock

Originally Posted by polgara

~ Focusing only on tourism, the recent ISIS massacre of vacationers in Tunisia is bound to cool tourism in many places around the globe, Greece included ~

One of the problems Greece has had is that would be tourists end up paying extortionate airport taxes and costs when considering flying to Greece. If you look at hotel prices in Greece and Turkey, they are already quite cheap but the airplane and aircraft taxes take the costs very high. Flying to Spain and Portugal from the UK means less air flight time but the costs of hotels rises dramatically and the end result is holidays cost exactly the same whether you fly 1-2 hours to Spain or 7-8 hours to Greece.

Originally Posted by donsutherland1

--

Leadership requires difficult choices at times. Unfortunately, the Greek Prime Minister decided to punt on his leadership responsibilities by delegating what is a grave decision to the general public, who almost surely lack the details related to Greece's fiscal situation, the EU/ECB/IMF offer, and understanding of the consequences involved ~

I see his decision as carrying the people with him. Leadership does take difficult decisions but it also means you have to carry people with you sometimes. If the people choose to stay in the Euro then they will have to take the pain to make that happen; if they choose to exit, they need to know about the consequences.

If the UK was in such dire straits, I would want a say in such a national decision.

Re: Greece's Tsipras calls referendum to break bailout deadlock

Originally Posted by Jack Hays

What he promised was never possible, and led directly to the current crisis. This was foreseeable.

If that were to happen here, would the average guy on the street understand what's happening any better than the guy on the street in Greece? Human nature being what it is, I doubt it. People want to believe that politicians know best, since they are the leaders, so they leave the problem solving to them. Sometimes that works, and sometimes not, as the people of Greece are seeing firsthand.

Re: Greece's Tsipras calls referendum to break bailout deadlock

Originally Posted by Infinite Chaos

One of the problems Greece has had is that would be tourists end up paying extortionate airport taxes and costs when considering flying to Greece. If you look at hotel prices in Greece and Turkey, they are already quite cheap but the airplane and aircraft taxes take the costs very high. Flying to Spain and Portugal from the UK means less air flight time but the costs of hotels rises dramatically and the end result is holidays cost exactly the same whether you fly 1-2 hours to Spain or 7-8 hours to Greece.

I see his decision as carrying the people with him. Leadership does take difficult decisions but it also means you have to carry people with you sometimes. If the people choose to stay in the Euro then they will have to take the pain to make that happen; if they choose to exit, they need to know about the consequences.

If the UK was in such dire straits, I would want a say in such a national decision.

Tsipras created the problem and is now hiding behind the people.

"It's always reassuring to find you've made the right enemies." -- William J. Donovan